Boom Goes Bust: Texas Oil Industry Hurt By Plunging Oil Prices

Citigroup predicted the recent increase in oil prices is a temporary lull in the downward price trajectory. The bank lowered its crude oil price forecast. “Despite global declines in spending that have driven up oil prices in recent weeks, oil production in the U.S. is still rising, wrote Edward Morse, Citigroup’s global head of commodity research. Brazil and Russia are pumping oil at record levels, and Saudi Arabia, Iraq and Iran have been fighting to maintain their market share by cutting prices to Asia. The market is oversupplied, and storage tanks are topping out.

A pullback in production isn’t likely until the third quarter, Morse said. In the meantime, West Texas Intermediate Crude, which currently trades at around $52 a barrel, could fall to the $20 range “for a while,” according to the report. The U.S. shale-oil revolution has broken OPEC’s ability to manipulate prices and maximize profits for oil-producing countries.” [Bloomberg Business]

An expert panel assembled by the National Research Council of the U.S. National Academy of Sciences has outlined the current risk of climate change due to carbon dioxide emissions. “The committee was chaired by Marcia McNutt, the editor-in-chief of Science and formerly the director of the U.S. Geological Survey, who said in a released statement, “That scientists are even considering technological interventions should be a wake-up call that we need to do more now to reduce emissions, which is the most effective, least risky way to combat climate change.”

The National Research Council recommends — very reluctantly, and only for purposes of increasing our knowledge — government-sponsored research into so-called albedo modification, sometimes also called solar radiation management (a term the committee preferred not to use).” [Washington Post]

Duke Energy has asked for regulators to approve potential new programs that will greatly expand solar energy in South Carolina. “The plan includes customer rebates of up to $5,000 to install rooftop solar arrays. It offers renewable energy to nonprofit groups, churches and schools, for which solar power is often unavailable.

Duke will also seek proposals for 50 megawatts of utility-scale solar farms.

Duke said the plan, which needs approval by South Carolina’s Public Service Commission, will add up to 110 megawatts of solar energy in the state by 2021. Less than 2 megawatts of solar there is now connected to Duke.” [Charlotte Observer]